The Town Council gave its tentative blessing Tuesday to a plan that would finance the wastewater infrastructure needed for the 1,100-acre development known as Veridea.
The vote was unanimous to give town staff permission to explore the terms of the proposed agreement. But some council members still have concerns about the possible partnership between the town and the project’s owners.
Veridea’s owners requested the town’s help because it can’t afford to pay for the sewer infrastructure on its own. Apex would be responsible for financing a maximum of $27.5 million in improvements, which would be recouped in capacity fees once the development is built out.
Councilman Gene Schulze said the proposed financial benefits trouble him.
“The problem I have is mainly philosophical,” Schulze said. “It’s not fair to favor one developer and not another. I’ll support the motion, because I’m never opposed to getting more information, but in principle, I’m opposed.”
Mayor pro tem Nicole Dozier agreed with Schulze’s concerns about favoritism. She said she wants to be assured that a similar agreement would be offered to any developer bringing a similar project to Apex.
The town could use its contribution as leverage as officials try to ensure Veridea resembles the sustainable, mixed-use development that was promised when it was introduced almost seven years ago.
Hudson Realty Capital, the owners of Veridea, has proposed a temporary plan that would first allow it to use about half of the remaining capacity at Apex’s old Middle Creek wastewater treatment plan for no more than 15 years. That first stage would require about $2.5 million from the town’s water and sewer reserve fund to pay for a first pump station and force main to direct waste eastward through existing sewer lines.
Eventually, about 5 miles of new sewer lines and a second pump station would need to be installed at a cost of about $25 million, linking the property to the New Hill wastewater treatment plant on a permanent basis and redirecting waste there from the Middle Creek facility.
Mayor Lance Olive and Councilman Bill Jensen, both members of the town’s planning committee, have said they appreciate the amount of development outside of Veridea that the investment would make possible.
More than 1,200 acres beyond the Veridea property would be served by the proposed sewer expansion, and much of that land has been identified by the town as prime real estate for some of the commercial tenants it hopes to attract. Other than this proposal, the town doesn’t have the means or a direct incentive to extend sewer service into the area.
“This is a big step in the site certification process, as far as recruiting businesses to Apex,” Councilman Wes Moyer said of having sewer service already in place when commercial developers explore interest in the town.
“This would give (economic development director) Joanna Helms more land, more property to work with, as she recruits businesses,” he said.
The legal and financial details of the arrangement will be worked out at the staff level, but the town has made clear Hudson needs to find a way to insulate the town against losses in the event that Veridea doesn’t pan out.
Hudson’s response to that request was presented in a planning committee meeting this summer. Hudson promises as collateral a piece of land – equal to 150 percent of the value of the town’s stake in its sewer infrastructure – to be released to the town if the new sewer line isn’t finished within 10 years of the agreement. The council’s vote Tuesday gives the town’s attorneys and financial experts permission to ensure such an agreement would be in the town’s best interests.
“I know this is a new concept, going into partnership to get this built here, but I also feel like we’ve been doing things a certain way for so long, and what are we getting from it?” Councilwoman Denise Wilkie said, acknowledging Dozier and Schulze’s concerns. “Maybe it’s time we step out of bounds and do something different.”
Gargan: 919-460-2604; @hgargan
What is Veridea?
Veridea is a 1,100-acre development proposed for land in southwest Apex bounded by U.S. 1, N.C. 54 and N.C. 55. Tom Hendrickson of Lookout Ventures introduced the project to the town in 2008 as a sustainable, mixed-use development that would allow residents to live, work and shop – a development strategy meant to ease the burden on Apex’s roads and highways as the town grows.
Since then, Hudson Realty Capital, the investment group that now owns the land, is anxious to begin building and deliver returns to its investors. Hudson’s current plan is to begin building houses and wait for retailers and office tenants to fill in behind residents. Thus far, some council members haven’t favored that approach or proposed departures from the sustainable aspects of Hendrickson’s original proposal.
The current council majority has prioritized commercial development above further residential construction, and those council members are worried a homes-first strategy could compromise the development’s mixed-use potential. They want more of a guarantee that commercial tenants will materialize.
Meanwhile, Hudson representatives say that building homes first is the only thing that can guarantee interest from commercial tenants, who often want a substantial number of residents in place before setting up shop nearby.